lifecontingencies (version 0.0.3)

annuity: Annuity function

Description

Function to calculate present value of annuities-certain.

Usage

annuity(interestRates, periods, type = "immediate")

Arguments

interestRates

Effective interest rate expressed in decimal form. E.g. 0.03 means 3%. It can be a vector of interest rates of the same length of periods. If interestRate = infinity then it returns the value of a perpetuity.

periods

Number of payments.

type

A string, either "immediate" or "due".

Value

• A string, either "immediate" or "due".

Details

This function calculates the present value of a stream of fixed payments separated by equal interval of time. Annuity immediate has the fist payment at time t=0, while an annuity due has the first payment at time t=1.

References

Broverman, S.A., Mathematics of Investment and Credit (Fourth Edition), 2008, ACTEX Publications.

See Also

accumulatedValue

Examples

# The present value of 5 payments of 1000 at one year interval beginnin now when the interest rate is 2.5% is
	1000*annuity(interestRates=0.05, periods=5, type = "due")